DOT wants to eliminate older, unsafe rail cars carrying crude oil

The U.S. Department of Transportation proposed on Wednesday a two-year phase-out of older railroad tank cars used to transport crude oil, which have been involved in several serious derailments over the past year.

Transportation Secretary Anthony Foxx outlined the long-anticipated proposals more than a year after a deadly derailment in Quebec focused government and public scrutiny on the rising volumes of crude oil shipped by train.

The public has 60 days to comment on the proposed rules, and Foxx said the department wouldn’t grant an extension because of the urgency of the issue. The shortened time frame is likely to set off a flurry of efforts in Washington by oil producers, rail companies, refiners and tank car manufacturers, as well as community and environmental groups.

The department had sought input from these groups, which often had different priorities and couldn’t agree on the details. But Kevin Sheys, an attorney who advises rail transportation clients, said DOT took a balanced approach.

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“The crude needs to move, but we have to move it safely,” he said. “And the proposed rule seems to reflect the government’s effort to balance those goals.”

The DOT will seek the phase-out or retrofit of older model DOT-111 tank cars from crude oil and ethanol service. They’ve long been known to be vulnerable to failure in derailments.

“We are proposing to phase out the DOT-111 tank car in its current form,” Foxx said.

The department offered various options for upgraded tank cars, including thicker steel shells, electronic braking and rollover protections. The proposal would require retrofits within five years for newer tank cars built to an industry-adopted higher standard.

The DOT proposed a maximum 40 mph speed in all areas for trains that are operating with older tank cars and for urban areas with more than 100,000 residents. Trains with tank cars that meet the new requirements would be permitted to travel at 50 mph outside urban areas.

It also proposed codifying its May 7 emergency order requiring railroads to notify state and local emergency officials about shipments of 1 million gallons or more of Bakken crude oil, a lighter type from the northern Great Plains that’s been involved in recent derailments.

Lawmakers on Capitol Hill who’ve been pushing the DOT and the Obama administration to move swiftly on the new rules responded favorably to Wednesday’s announcement.

“We have seen the devastating impact on communities nationwide when our regulatory regime lags behind rapid industry changes,” said Sen. Jay Rockefeller, a West Virginia Democrat who chairs the Senate Commerce, Science and Transportation Committee.

In addition to the notice of newly proposed rules on tank cars, speeds, braking and crude oil testing, the DOT released an advanced notice of new regulations to govern the expansion of comprehensive oil-spill response plans for crude oil trains.

Currently, railroads aren’t required to have such plans for crude oil trains, but derailments in Quebec, Alabama, North Dakota, Virginia and elsewhere since last year have revealed gaps in emergency response training, equipment and staff.

“We are not necessarily done yet with all the ways we plan to address this issue,” said Cynthia Quarterman, the head of the Pipeline and Hazardous Materials Safety Administration at the DOT.

The department on Wednesday also released the results of its crude-oil testing effort begun last year. It concludes that Bakken crude oil, which is extracted from shale rock by hydraulic fracturing, is more volatile than other crudes.

The department proposed a sampling and testing program, and it would require crude oil shippers to provide information from the tests upon request. The petroleum industry and refiners have disputed the department’s research on Bakken’s volatility, and on Wednesday they cited industry studies that have found the opposite.

“Multiple studies have shown that Bakken crude is similar to other crudes,” said Jack Gerard, the president and CEO of the American Petroleum Institute.

Petroleum and ethanol producers have also pushed back on some of the proposed tank-car standards, including the thickness of the shells.

Two of the DOT’s proposals would increase shell thickness from the current industry standard of 7/16 inch to 9/16 inch. A third option would keep the current standard, which the industry adopted in 2011. Thicker shells could improve puncture resistance, but they also add weight that means the cars could carry less cargo.

Foxx said Wednesday that the department’s proposals were “supported by sound data and analysis.”

Some environmental groups have called on the DOT to ban the use of older tank cars immediately, a move that would disrupt the country’s burgeoning energy production.

Matt Krogh, who’s fought the expansion of coal and crude oil rail terminals in the Pacific Northwest for ForestEthics, an environmental advocacy group, accused the Obama administration of supporting the wrong side.

“The administration seems to have carefully calculated and managed the inconvenience of these rules to the oil industry,” he said, “but they’ve severely underestimated the threat of these trains to the American public.”

The rail industry’s chief advocacy group in Washington praised the DOT’s proposal, which largely aligns with steps the industry has already taken or proposed.

“The fact that the proposed rule incorporates several of the voluntary operating practices we have already implemented demonstrates the railroad industry’s ongoing commitment to rail safety,” said Edward Hamberger, the president and CEO of the Association of American Railroads.